B2B E-Commerce @ MIT

CSG, 10/6/1999

Lorraine Rappaport

<ljr@mit.edu> 617.253.0749

MIT E-Commerce Initiatives

• SAPweb - web requisitioning front-end to SAP

• VIP Card - MIT issued credit card with approvals in SAP

• Online credit card processing - allowing internal merchants to sell on the web

• ECAT - electronic catalog procurement with preferred suppliers

ECAT History

• First version of ECAT (Electronic Catalog) introduced in 1995 as part of supplier consolidation effort

• Office Depot, VWR Scientific, and BOC Gases built online catalogs for MIT with our pricing and product restrictions

• Required separate authorization mechanism

• Difficult to scale to community and other vendors

• Required non-standard, problematic desktop software

• Requisitioning not integrated with SAP; no approvals

ECAT2 Implementation

• First implementation with NECX (rolled out in February, 1999)

• BOC Gases and Office Depot go live in June, 1999

• VWR now in pilot testing

• Check out: http://web.mit.edu/ecat and http://web.mit.edu/sapweb

ECAT2 Model Components

• Utilizes vendors’ standard public sites with MIT pricing

• Fully integrated with SAP for authorizations, commitments, payments

• Uses SAPweb requisitioning front-end to SAP• Digital certificates for authentication• Based on OBI (Open Buying on the Internet)

standard for transmitting vendor shopping baskets• Utilizes EDI to format and send POs and invoices

ECAT2 Design

SAP

RequisitionSAPWeb

Requisition Authorizations

ApprovalsUser's Desktop Purch. Order A/P Payment

line item detail fororder processing

(OBI 850 order request) PO sent via Invoice sent via paper (for now)MIT EDI over the InternetEDI over the InternetVendor authentication 850 transaction 810 transaction

via x.509certificates

Vendor Shopping Vendor Vendor VendorCatalog Basket (optional Order A/R A/R

for recon- System System Funds Receiptciliationonly) shipment

order is shippeddirectly to customer

Advantages of the Model

• Modular enough to swap out components as technology changes (e.g. XML???)

• SAPweb and SAP interfaces are familiar

• Takes full advantage of vendors’ value-added services (e.g., VWR MSDS sheets, other vendors’ “extras”)

• Allows procurement staff to focus on vendor relationship management

Disadvantages of the Model

• Multiple vendor sites - different capabilities, different navigation

• Many components to maintain

• Not scalable to all vendors

• Batch processes within SAP and at vendor sites mean that orders are not quite real time

But, is it successful?

• Daily traffic averages 100 orders per day

• Smooth transition from ECAT(1)

• Now focusing on converting paper requisitioners

• Dollar savings could be calculated at $250K-$500K/year + additional savings from preferred partnerships

Coming Attractions

• Extending ECAT2 model to other vendors

• Extending ECAT2 model to internal providers

• Enhancements wish list:– Cross-catalog search capability?– Electronic funds transfer?